Southside City Council unanimously approved a $2.5 million tax abatement agreement with Johnson’s Giant Foods to operate in the former Burton’s Grocery.
In a room filled to the brim, residents of Southside listened as the council and Mayor, Dana Snyder, discussed the tax agreement and what it would mean for the city. Residents were given the opportunity to ask questions, one of which was if they would have a deli.
“Yes ma’am, there definitely will be one,” Mack Johnson said.
The room erupted with excitement.
The agreement is contingent upon closing on the property July 15, according to Snyder. Southside will purchase the property for $1,750,000, and then lease it to Johnson’s for $8,000 a month for 96 months with an option to purchase after five years. The total cost for Johnson’s, if they decide to purchase, would be $768,000.
The almost million dollars for the property is another tax incentive for bringing Johnson’s to Southside, according to Snyder.
Once Johnson takes possession of the building the company will be responsible for any remodeling and renovations to the building, which is estimated to cost around $2.5 million, according to Johnson’s.
“I just want to thank the council, mayor and the citizens for giving us this opportunity,” Johnson said at the council meeting. “We will put our best foot forward and we are tickled to have this opportunity.”
A conservative projection of Johnson’s sales annually is around $12 million, according to Snyder, which would make the contribution of around $600,000 in sales tax for Southside once the tax abatement is paid off. Until it is paid off, Southside will credit Johnson’s back one half of the sales tax proceeds, according to Snyder, which will be paid through a refund that is paid to the city. Once the abatement agreement is fulfilled the city will receive 100 percent of the sales tax.
The abatement agreement will take anywhere from five to eight years for the $2.5 million to pay off completely.
“I know it’s election season, but this is what will benefit the city for years to come,” Snyder said. “No matter who is in office.”
Johnson’s will also create new full-time and part-time job opportunities with a projected combined annual salary of $1.2 million.
Another item on the agenda for Southside was the first reading to set up a declared disaster recovery fund that would be maintained at $500,000.
The recovery fund currently has $36,000, which is nowhere near where it should be, according to Danny Garnett, council member.
In 2018, when a tornado hit Southside, Garnett said the city had to scrabble to find the funds to aid in the recovery efforts.
“The total cost of the storm was about $1.4 million,” Garnett said. “Southside had a large expenditure for debris removal and emergency response and all that was happening in the first 72 hours.”
The $1.4 million was split between Southside and Rainbow City.
Southside spent $400,000, at a minimum, for the clean up and it took two years to be reimbursed from FEMA, according to Garnett.
Money from the recovery fund can only be used when an emergency has been declared by the governor or state legislature. The mayor can also declare an emergency with the approval of the city council.
The next meeting of the Southside City Council will be July 8, at 5 p.m. at City Hall.
